Monday, December 19, 2016

With December 31 fast approaching, now is a good time to review tax planning actions that you have already taken this year and to discuss with your tax adviser other things you may be able to do before year-end to further reduce your 2016 income taxes.

If you will be in a lower tax bracket in 2017, it may be prudent to defer some of this year’s income until next year and to pay deductible items that you would normally pay in early 2017 before December 31, 2016.

Business and professional people who use the cash accounting method may be able to defer the receipt of income by not billing until year-end for services rendered in 2016. The receipt of a bonus that your employer is free to give or not give can be deferred into next year to lower your 2016 compensation income.

Pay real estate taxes and the January 15 installment of state and local income taxes before December 31 to accelerate these deductible items into the 2016 tax year. If possible, pay all medical bills, if the total will exceed 7.5% of your adjusted gross income, before year-end to be able to use that expense as a deduction, if you itemize.

Another income tax deduction that is very easy to accelerate is the charitable deduction. You have total control on when this deduction will be available; all you have to do is complete your charitable gifts before December 31.

Make time for year-end tax planning with your advisers; it can beneficial to you and to the charitable causes you wish to support.

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Wednesday, December 14, 2016

Have you given much thought to what your legacy will be? Most of us desire to make a difference in the lives of our loved ones. We take steps to ensure they will be taken care of when we are no longer here on this earth. Through proper financial estate preparation we are able to provide this care. But have you also thought about memorializing your Christian faith through the written statement of your last will and testament?

Estate documents present a wonderful opportunity to leave behind a written testimony of your faith in Christ. Evangelist Dwight L. Moody’s Will contained this great example as a lasting expression of his eternal confidence in Christ. “You may have heard that I died. Nothing could be further from the truth. I am alive and well, enjoying the presence of God for eternity. It’s my hope that you will take great joy in my recent promotion. It’s also my prayer and request that if you haven’t discovered the truth about God sending His son to die on the cross so that none should perish, you will seek His truth with great urgency as a personal favor to me.” Another enduring, clear statement was left by Patrick Henry, one of America’s Founding Fathers, who said, “If I had all the goods this world can offer but had not faith in Christ, I would amongst all men be poor indeed.”

You can create your own letter to loved ones, affirming and encouraging them. Consider joining the many Christians who, as a part of their estate planning, have made such statements either by incorporating them into the text of their planning documents, or in letters to be found with their documents following their death. Such statements would be treasured and serve as a witness to those you leave behind.

The staff of the Kentucky Baptist Foundation are available to you for a private, confidential estate stewardship and legacy planning consultation. To request a consultation, please contact the Foundation’s trust counsel, Laurie Valentine, or me at our toll-free number (866) 489-3533.

Richard Carnes is the president of the Kentucky Baptist Foundation, PO Box 436389, Louisville, KY 40253; toll-free (866) 489-3533; KYBaptistFoundation.org.The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Friday, December 2, 2016

Scripture and life experiences teach that there are important differences between capital and income. Income is earned on a regular basis and is spent meeting daily needs. Unspent income typically becomes part of our capital and is invested in savings accounts, houses, retirement accounts, businesses and more. We work hard to accumulate sufficient capital over our working years to enable us to live off the income the capital produces when we cease working to earn a regular salary.

Another word for capital might be “endowment”. An endowment is simply a collection of assets that are invested to produce income that can be used for personal or charitable purposes. We most commonly think of endowment as financial assets and investments, but the Old Testament contains significant examples of God using capital to advance His Kingdom. In reading Genesis 41 we learn of a time early in Israel’s history when God used Joseph to advise the king of Egypt to store grain in anticipation of a looming seven years of famine. God inspired Joseph, and this grain storage became an endowment that kept the people from starvation. From this saved population descended the Savior of the world.

As we evaluate what God has entrusted to us in the way of capital assets within our estates, we must acknowledge the three possible destinations for our assets. We can transfer assets to loved ones, to Christian ministries that have significantly impacted our lives, or we can endow the U.S. Government through taxes paid to the Internal Revenue Service. Fortunately, many faithful Baptists are looking at the ministries of their churches and prayerfully considering what God is inspiring them to do. Individuals can help sustain Christian ministries during a time when their local church may experience a “famine” of financial support for regular ministry efforts.

To make intentional plans to care for your families and the ministries God is inspiring you to support, the Kentucky Baptist Foundation is a resource to call upon. If you have questions or desire a private estate stewardship consultation, please contact the Foundation’s trust counsel, Laurie Valentine, or me at our toll-free number (866) 489-3533.

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Friday, November 4, 2016

Would you like to provide future support to your church or another favorite Baptist cause while receiving guaranteed income for the rest of your life, management of assets and tax savings? If your answer is yes, a charitable gift annuity may be just what you are looking for.

A charitable gift annuity is a contract between you and the Kentucky Baptist Foundation under which you agree to make a gift of cash or appreciated stocks, bonds or mutual fund shares and, in exchange for your gift, the Kentucky Baptist Foundation agrees to pay you (or you and one other person) a fixed amount each year (“annuity”) for the rest of your life.

The annuity payment amount depends upon the value of what you give and your age at the time you make the gift. The older you are the higher the payment rate. The annuity payment amount is not dependent on what your gift earns.

At your death, whatever is left of your gift is distributed to the charitable cause or causes you have named to be used as you direct.

Tax savings may be available from the charitable income tax deduction that is allowable and also from the fact that part of each payment you receive is tax-free. Those tax benefits can make the cost of making a charitable gift annuity gift very reasonable.

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Thursday, November 3, 2016

Making charitable gifts is not only an opportunity for you to make a difference in your community through a favorite charitable ministry; it’s also an excellent way to reduce your tax burden for the year.

A tax deduction for charitable giving isn’t guaranteed just because you’re generous. As with everything in tax law, it’s important to follow the rules. By doing so, you can help ensure that your donations result in maximum benefits for you and the chosen charitable organizations you support through your gifts.

The Internal Revenue Service offers the following reminders to help taxpayers plan their gifts to charity:

· Qualified charities. Only donations to eligible organizations are tax-deductible. Select Check, a searchable online tool available on IRS.gov, lists most organizations that are eligible to receive deductible contributions. In addition, churches are eligible to receive deductible donations. That is true even if they are not listed in the tool’s database.

· Year-end gifts. Contributions are deductible in the year made. Donations by check count for 2016 as long as they are mailed in 2016. Also, donations charged to a credit card before the end of 2016 count for 2016, even if the credit card bill isn’t paid until 2017.

· Itemize deductions. For individuals, only taxpayers who itemize their deductions on Form 1040 Schedule A can claim deductions for charitable contributions. This deduction is not available to individuals who choose the standard deduction.

· Record donations. The long-standing requirement of the IRS is that a taxpayer obtain an acknowledgement from a charity for each deductible donation (either cash or property) of $250 or more. Also, be aware that additional rules apply for a property contribution of $250 or more.

As you begin to look beyond 2016, you may also wish to consider arranging for future charitable gifts that result in immediate tax and other financial benefits. By doing so, you may be able to enjoy tax savings, increased income and other financial advantages today while providing for a significant charitable gift to a favorite Baptist ministry as part of your long-range planning.

If you have questions about these gift-planning strategies, please call the Foundation’s trust counsel, Laurie Valentine or me at our toll-free number, (866) 489-3533.

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Wednesday, October 5, 2016

With financial market ups and downs over the past few years there probably have been times when your stocks, bonds and/or mutual fund shares have been worth considerably more than what you paid for them and times when that has not been the case. And, that same pattern will continue in the future.

For those considering an above-and-beyond gift to their church, or one of our KBC or SBC ministries, using appreciated securities to fund that gift may be a better choice than giving cash. That’s because your gift of appreciated stocks, bonds or mutual fund shares can provide both income tax savings, if you itemized deductions on your income tax return, and capital gains tax savings.

The income tax deduction value of your gift is the current price you would get if you sold the security, not what you paid for it. And, by giving the appreciated security you avoid the capital gain (difference between current market value and what you paid for the security) you would have to report if you had sold it.

Appreciated stocks, bonds or mutual fund shares can be used for outright gifts or to fund a gift that pays you an income for life with remainder to the charitable cause or causes you designate at your death.

Tap in to the potential for double tax savings by prayerfully considering a gift of appreciated securities.

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Tuesday, October 4, 2016

United States tax laws provide an incentive in the form of tax savings for making gifts to support non-profit organizations that provide vital services to our communities. The underlying philosophy behind this tax incentive is that private financial giving does many jobs that government entities otherwise might be called upon to do with tax money. “Social capital” is that portion of your wealth that will either pass involuntarily to the government as taxes or which can be directed voluntarily by you to charitable causes consistent with your spiritual values. If your social capital passes as taxes, you permit the government to choose what institutions and programs will be funded. Alternatively, charitable giving allows you to direct these funds to ministry causes and Christian organizations that will perpetuate your highest spiritual values.

Directing your social capital demonstrates good stewardship. First and foremost, the ministries and charitable causes that echo your values will be enhanced and sustained. Moreover, your Baptist church, the Kentucky Baptist Convention, and its agencies and institutions are making a gospel difference for the Kingdom of God in our state, nation and around the world. These ministry organizations are worthy recipients of a donor’s social capital to help sustain their ministries.

Individuals commonly express concern that giving social capital to church and ministry causes could affect the financial security their family. However, there are a variety of creative giving options that allow you to support and sustain Kingdom work while also assuring the future financial security of your family. Through prudent planning, the potential tax savings resulting from your charitable gifts may actually provide more financial resources for you and your family, and those savings may permit you to financially give more that you ever dreamed possible.

If you have questions about these gift planning strategies, please contact the Foundation’s trust counsel, Laurie Valentine, or me at our toll-free number (866) 489-3533 for a private estate stewardship consultation.

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Monday, September 12, 2016

Planning for how to provide for your family at your death should be a key objective of estate planning and it is good stewardship. The costs of probating and distributing your estate and the amount of death taxes due may be greater if you have not planned well, which means less to pass to your beneficiaries.

For those with children under age 18, thought needs to be given to whom you want appointed as guardian for your children if both parents died before all are 18 or older. The court-appointed guardian will make all the decisions you as a parent would be making for your children until each reaches age 18. You can include a provision in your Will designating who you want appointed as guardian.

A decision also needs to be made as to whether the share you want to leave to a family member will be given to them outright or whether their share should be managed by someone else, either until they get to an older age or perhaps for the rest of their life if they are incapacitated or just not good money managers.

Including a trust provision in your Will allows you to empower another person to manage the share of a family member beneficiary. Usually the trustee is permitted to use the trust income for the beneficiary and may also be authorized to use trust principal for the beneficiary’s health, education and other needs.

Heed Paul’s admonition in 1 Timothy 5:8 and “….provide for [your] relatives, and especially for the members of [your] household…”

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Tuesday, September 6, 2016

As the development agency for Kentucky Baptist churches, the Kentucky Baptist Foundation (KBF) helps educate a church’s staff and lay leadership on effective ways to implement intentional legacy planning programs for church members. It is imperative that churches educate and encourage their members to see their financial stewardship more broadly than just the donation they place into the offering plate. This stewardship training extends to planning the utilization of all the financial resources entrusted to church members for the benefit of their family, their church, and Kingdom causes.

Church leaders can make great strides in impacting the financial well-being of church member’s families and the well-being of the church’s ministries by scheduling teaching opportunities for their church members on how to become “Kingdom -minded” stewards. The great news for church leaders is they are not alone in providing this type of Christian estate stewardship training for their members. The KBF helps facilitate this training of church members to become more “Kingdom-minded” by conducting educational seminars on financial and estate planning topics at your church. This educational resource is provided by the KBF at no cost to Kentucky Baptist churches.

Some examples of frequently requested seminars are:

Estate Planning Mistakes and Solutions - Discover what the ten biggest estate planning mistakes are and how to avoid them to assure you manage your finances wisely.

Who Will Be In Charge If …? – Explores incapacity planning tools – powers of attorney, health care advanced directives, Living Trusts and what happens if no prior planning has been done.

Ways To Make Gifts To Your Church – Estate stewardship giving ideas to encourage church members to take stewardship to a deeper level – what to give, how to give, and why we as Christians should give.

As your church begins to plan its Fall series of education and training for Wednesday evenings, Sunday evenings or the Sunday morning Sunday School hour, please consider inviting KBF staff to conduct a seminar session at your church. To learn more, please contact the KBF’s trust counsel, Laurie Valentine, or me at our toll-free number (866) 489-3533 for the KBF’s full list of legacy planning seminar topics and to schedule a seminar date.

Tuesday, August 16, 2016

Your church, association and the Kentucky Baptist Convention and its agencies and institutions provide a wide variety of important ministries that need financial support. The ways you can support these important causes through legacy giving (giving out of your assets, rather than your income) are also wide-ranging.

An outright gift of cash, appreciated securities or real estate is probably the most common, and simplest, way to make gifts during your lifetime.

Other methods of lifetime giving, such as charitable gift annuities and charitable remainder trusts, allow you to set up a future gift to one or more Baptist causes while retaining an annual income for your lifetime or a term of years.

There are also a variety of gifts you can arrange now to benefit the causes of your choice at your death. The most common is a bequest in your Will or Living Trust. Another possibility is to name a Baptist cause as the beneficiary of some portion of your retirement account, IRA or a life insurance policy.

You can designate your gift be used for a specific program or ministry or you can allow the organization to choose how to use your gift. You may also want to limit the organization to using only the earnings off what you give (this type of arrangement is called an “endowment fund”).

Gifts may be made directly to the benefiting organization or may be given to a third party, such as the Kentucky Baptist Foundation, to manage for the designated beneficiary cause or causes.

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Tuesday, August 9, 2016

The annual report on charitable giving in the United States for the year 2015 was recently published by Giving USA Foundation. The Giving USA report announced that 2015 was America’s most-generous year ever with a total of $373.25 billion contributed to charitable causes, which was a 4.1% increase over the prior year. Religious organizations continue to remain the number one recipient of charitable contributions in the USA at 32% or $119.3 billion, followed by donations to Education at 15% or $57.5 billion and Human Services at 12% or $45.2 billion as other large recipients.

There has been a general slowing of giving to religious causes in recent years, but contributions held steady at 32% from 2014 to 2015. The encouraging news is that almost 74% of religious organizations responding to the Nonprofit Research Collaborative Winter 2016 survey reported increases in 2015 contributions.

We are pleased to report that the Kentucky Baptist Foundation for its fiscal year 2015 distributed in excess of $6.0 million toward Kingdom advancement through the various church, missionary, educational, evangelistic and compassion ministry causes of the Kentucky Baptist Convention, the Southern Baptist Convention and other Christian organizations. The distributions from the Foundation during 2015 increased 10.7% from the prior year.

These distributions were made possible by the many faithful and generous Christian stewards who practiced estate stewardship and generous giving at a deeper level. Their gifts through bequests, charitable trusts and other types of legacy giving have created perpetual endowment funds that will provide growing distributions to Baptist causes until Jesus comes again.

If you have questions about Christian estate planning strategies or want to request a private estate stewardship consultation, please contact the Foundation’s trust counsel, Laurie Valentine, or me at our toll-free number (866) 489-3533.

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Thursday, July 14, 2016

Joe and Linda decided they wanted to do something significant for their church and they hoped they could use their house to accomplish their giving objectives. They considered making a current gift of their house, but decided against that because they hope to live in it for many more years.

The logical solution seemed to be to add a gift of the house to their church in their wills to take effect after both of them are deceased.

Then Joe and Linda heard about a way to make a gift to their church now, get a sizable current income tax deduction and still be able to live in their home for the rest of their lives. This solution---a retained life estate gift----sounded like the right plan for them.

To make a retained life estate gift homeowners deed their personal residence or farm to a charity through an irrevocable retained life estate agreement. The deed includes a provision reserving to the owners the right to use the property for the rest of their lives. At the death of the last life tenant, the charity becomes the full outright owner of the property.

The value of a retained life estate gift for income tax deduction purposes is the current market value of Joe and Linda’s house reduced by the value of their lifetime right to use the house.

Joe and Linda, as the life tenants, will be expected to maintain property insurance, pay the property taxes and pay for typical maintenance and repair items.

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Tuesday, July 12, 2016

Each year the Kentucky Baptist Foundation is fortunate to receive estate gifts that were planned in earlier years by thoughtful, forward-looking donors. These donors, through provisions in their wills and other long-term plans, made gifts that might otherwise not have been possible.

Other individuals would like to support the ministries of their church and Baptist causes but think they don’t have anything to give or believe such a gift would compromise their family member’s future security. This is a common feeling but there is encouraging news on ways you can make a gift from assets you accumulated during a lifetime.

Giving through your will can be a convenient way to support the Christian ministries important to you. After first providing for your loved ones, you may decide to make a charitable gift of a specific amount, a percentage of your estate, or all or part of what remains after family and/or friends have been remembered.

While a will is usually the first method that comes to mind when considering a legacy gift, there are other ways to accomplish a donor’s charitable goals. These plans are generally easy to put in place and can be adjusted if your circumstances change. Some of these strategies may include gifting through trusts, gifts of life insurance, gifts of real estate assets or gifts of retirement plan remainders.

Giving through a trust is an often used strategy. Many individuals make use of trusts created during life to provide for management and future distribution of assets, then, at the termination of the trust, direct that a portion of the remaining assets be used for charitable purposes.

The Kentucky Baptist Foundation staff is honored to assist numerous Kentucky Baptists that have sought God’s direction on how they should consider planning their financial matters in order to provide for their families, their church and other Baptist ministry causes.

If you have questions about these giving strategies or want to request a private estate stewardship consultation, please contact the Foundation’s trust counsel, Laurie Valentine or me at our toll-free number (866) 489-3533.

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Tuesday, June 21, 2016

Graduation ceremonies are occurring across the Commonwealth of Kentucky at this time. It is always an exciting time for students and their families as they celebrate the achievement of an educational milestone and look forward to the next phase of the student’s life. For many students, college or technical school awaits them, but some budding young scholars must defer the hope of achieving their academic dream due to a lack of sufficient financial resources.

The Kentucky Baptist Foundation has been honored to work with numerous donors whose passion is helping students secure the necessary financial support to achieve their educational goals. One example of this collaboration is the scholarship funds that donors have established at the Foundation to help off-set the costs of student’s education. The Kentucky Baptist Foundation’s scholarship committee met recently to review student applications and grant scholarship awards for the upcoming academic year. The scholarship committee was privileged to award 74 scholarships to college and seminary students totaling $93,385 from the 17 scholarship endowments administered by the Foundation.

You may share this same passion for education and would like to explore how you can implement a legacy gift plan to fund a scholarship endowment like the ones referenced above. Or you may have a Christian school, college or Baptist seminary that you would like to support through a legacy gift. Also, churches can create scholarship funds through the Foundation that will provide much needed financial assistance to their college bound students.

The Kentucky Baptist Foundation staff is available to assist you by providing guidance in creating these scholarship funds and charitable endowments to support worthy Christian education causes across the state and the nation. To learn more, you may contact the Foundation’s trust counsel, Laurie Valentine, or me at our toll-free number (866) 489-3533.

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Thursday, June 16, 2016

· 60% of adults in the United States have never made a Last Will and Testament. Making a will is the single most important act of Christian financial stewardship you can ever take.

· If you have not made a Will, the state in which you reside has a plan of asset distribution written for you. Here in the Kentucky that plan is called the “Kentucky Intestate Succession Statute”. There is a good possibility that Kentucky’s “will” sets up a plan of distribution that doesn’t meet your family’s needs or your wishes regarding how your assets will pass at your death.

· A court will decide who will rear any minor children if both parents are deceased and they have not made a will or included a nomination of guardian provision in their will for the children. This is a far more important issue than who will receive your assets at death.

· Kentucky’s plan for asset distribution does not include your church or any other Christian ministry. You also forfeit the option of creating provisions that will benefit both your family and the Lord’s work.

· Without a properly drawn will, the death taxes and cost of administering your estate may be higher, thereby reducing what will be available for your family.

· By having a properly drawn will, you get to choose who serves as executor of your estate.

· By having a properly drawn will you are helping ease family friction at your death. This is especially important at a time when your loved ones are grieving your death.

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Wednesday, June 1, 2016

Individuals who seek guidance from the Kentucky Baptist Foundation often ask for suggestions on how best to start their estate planning process. We suggest using the following four steps as a framework for organizing your thoughts as you begin.

People

The people in your life are central to the planning process. List the individuals for whom you are now financially responsible and those whom you would like to assist in the future. It is also appropriate to include your church and other Christian ministry causes on the list as part of your “family.”

PropertyNext, we suggest listing your property. Think of everything you own, including financial assets and tangible property. Begin with income from all sources (salary, investments, rental property, etc.) Also include any current balances in pension plans, individual retirement accounts (IRA’s), 401K plans and other retirement accounts. Beside each asset, list its current value and the asset’s original cost. Finally, note whether you own the asset outright, or with others.

PlansYour plans begin to take shape as you review the list of persons and consider how you wish to provide for them. Study the various assets you listed to determine which may match the needs of each person or charitable cause you identified as important to you.

PlannersVarious professionals play a key part in establishing and advising your estate plan. At the top of the list of planners will often be an attorney and an accountant. Your attorney drafts your will and other legal documents. Your accountant can provide valuable advice on tax matters as well as other estate planning issues, in consultation with your attorney. Others who may participate include life insurance professionals, financial planners, real estate professionals and trust officers.

The staff of the Kentucky Baptist Foundation would be honored to be a part of your planner team. We welcome the opportunity to work with individuals seeking how best to organize their estate planning goals to achieve their personal and charitable objectives. To request a private estate stewardship consultation, please contact the Foundation’s trust counsel, Laurie Valentine, or me at our toll-free number (866) 489-3533.

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Tuesday, May 17, 2016

A Christian estate plan is one that has been developed by prayerfully determining how God wants you to provide for your family and other “dependents” at your death and how your finances will be managed and decisions will be made for you if, at some point in the future, you are no longer able to do that for yourself because of a stroke, dementia or accident.

To accomplish God’s plan for who is to receive what you own when you die you need a will designating how your probate estate assets (individually-owned assets and amounts payable to your estate or executor at your death) will pass at your death.

The distribution plan in your will should be coordinated with life insurance and retirement plan beneficiary designations.

And, you must also look at how your assets are titled as assets titled as joint tenants with rights of survivorship do not pass under your will; they pass to the surviving joint owner.

God’s plan for asset management and decision-making in the event you become incapacitated can be accomplished by making a durable power of attorney. Using a durable power of attorney allows you to empower someone of your choosing to make decisions for you and manage your finances if you become incapacitated.

To assure the appropriate person(s) have authority to make healthcare decisions for you if you are incapacitated a healthcare surrogate designation should also be considered. And, by making a living will directive you can put in writing your wishes regarding the continuation of life-prolonging medical procedures in the event of a terminal condition diagnosis.

Be a good steward of all with which God has blessed you by taking time to do Christian estate planning.

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Tuesday, May 3, 2016

George Kinder, author of the personal financial planning book Seven Stages of Money Maturity, asks his clients the following three questions to help focus the client’s goal planning.

Question 1. Imagine that you have all the money you need now and in the future. What will you do with this financial abundance? How will you live your life? What if anything will you change in your lifestyle? Let yourself dream by describing a life that for you is complete and richly yours.

Question 2. You have just come from a doctor appointment and your physician told you that you have five years to live. The good part is you won’t ever feel sick. The bad part is that you will have no notice of your death. How will you live your life in light of this knowledge? What, if anything, will you change?

Question 3. You have just come from a doctor appointment and this time your physician tells you that you have only one day left in your life. The question you have now is not how to spend the hours that remain. Instead, ask yourself what am I feeling? What are my regrets and longings? What dreams will be left unfulfilled? What do I wish I had finished that is incomplete?

As I reflected on these three life scenarios my thoughts turned to Jesus’ parable found in Luke 12:16-21 of the rich man who decided to tear down his barns and build bigger ones, with the intent to take it easy; eat, drink and enjoy himself. God says to the man “You fool! This very night your life will be demanded from you. Then who will get what you have prepared for yourself.” This is a tragic consequence of storing up treasure purely for self while not being rich toward God.

The Kentucky Baptist Foundation staff is honored to assist numerous Kentucky Baptists that have sought God’s direction on how they should consider planning their financial matters in order to provide for their families, their church and other Baptist ministry causes. These thoughtful Christian stewards have followed a very different life path to that of the rich man in Jesus’ parable.

If you have questions about Christian estate planning topics or want to request a private estate stewardship consultation, please contact the Foundation’s trust counsel, Laurie Valentine, or me at our toll-free number (866) 489-3533.

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Wednesday, April 20, 2016

Whether you are using a revocable living trust as part of your plan for management of assets in the event of incapacity or an irrevocable trust for tax planning, one of the most important decisions is your choice for trustee.

Under Kentucky law, the trustee may be an individual or a bank, trust company or other entity that has trust powers. An individual serving as trustee does not have to be resident of Kentucky nor do they have to be related to you.

Think about the types of assets that are, or may be, in the trust. You will want to name a trustee that understands the management of those types of assets, knows about taxes, investments and financial matters.

The trustee should be someone who is a self-starter. There is little supervision of the management of a trust. Your choice should be someone that will not neglect their responsibilities due to lack of time, interest or knowledge.

Don’t just assume the person or entity you wish to name as trustee is willing to serve. Ask them before you complete your planning and, if possible, allow them to review the trust agreement before it is signed.

Finally, make sure that you have selected a trustee who can be objective. Trustees must make decisions that affect the interests of both the income beneficiaries and the remainder beneficiaries. While family members may be appropriate choices, in some cases you may need to consider a professional, corporate or institutional trustee. Corporate trustees are accountable not only to the beneficiaries of the trust, but also to their own management, directors, auditors and other examiners.

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Tuesday, April 5, 2016

Annually the Kentucky Baptist Convention conducts a wonderful multi-site event entitled Senior Living Celebrations for Kentucky Baptist senior adults. This year’s theme is Armored For Victory, based on the scripture passage of Ephesians 6:13-18. Attendees will have the opportunity to participate at either FBC Madisonville on April 18, Severns Valley Baptist Church on April 19 or FBC Richmond on April 21. The Kentucky Baptist Foundation is honored to again sponsor the breakfast at each celebration and provide leadership for one of the workshops that will be offered during this event.

This popular Kentucky Baptist Convention event is always well attended by enthusiastic senior adults who come to worship, learn and celebrate life together. This year, there will be over a dozen workshops at each location, covering topics such as tips on physical well-being, growth in prayer, navigating Medicare, missions and ministry opportunities for seniors, travel tips for your next senior adult trip, and more.

The Kentucky Baptist Foundation’s trust counsel, Laurie Valentine, will lead an excellent workshop session titled “Who Will Be in Charge If”, which explores what happens without planning for possible future incapacity. The session will detail the essential aspects of key incapacity planning tools including Powers of Attorney, Healthcare Advance Directives, and Living Trusts. Why is this topic so important? We should anticipate and plan for the possible event of an accident or an illness that leaves us incapable of making decisions for ourselves and incapable of managing our finances. Laurie’s seminar on this topic will equip you with the understanding of key documents you can put in place to ensure that should an incapacity occur, you and your loved ones will be properly cared for and the individuals you’ve selected to act on your behalf have the necessary authorization.

Laurie and I hope to see you at one of the upcoming Senior Living Celebration events so you too can be armored for victory. Come join us for breakfast and be sure to attend one of Laurie’s workshop sessions during the day. If you are not able to attend, you may always contact us directly to discuss how best to organize your estate planning goals to achieve your personal and charitable objectives to support your church and other Baptist causes. To learn more, you may contact Laurie Valentine, or me at our toll-free number (866) 489-3533.

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Wednesday, March 23, 2016

You do not have to be wealthy to be able to set up a plan that will provide financial support until the Lord returns to charitable causes that are important to you.

Providing ongoing support for your church; state, national and/or international missions; ministries to hurting children and their families; disaster relief; and/or other causes can be accomplished through the creation of a new endowment fund or by making gifts to an existing endowment fund.

An endowment fund is a permanent, perpetual fund managed either by the cause benefited by your gift or another entity such as the Kentucky Baptist Foundation. Only the earnings from the endowment fund are distributed for use by the cause(s) you name as beneficiaries; the original value of what you give is never distributed.

A large gift is not required to establish an endowment fund with the Kentucky Baptist Foundation. It can be started with any amount and you can add to it from time to time over your lifetime. This permits even those of modest means to do much more than they ever dreamed possible. As the endowment fund grows, more lives will be touched and blessed through the support provided.

Establishing (or adding to) an endowment fund during your lifetime may provide income tax savings if you itemize deductions and capital gains tax savings if you use appreciated assets to fund your gift.

All good things come from God. Establishing an endowment fund, whether through a single large gift or a lifetime of more modest levels of giving, permits you to demonstrate your gratitude for God’s blessings and your desire to be involved in touching lives in His name.

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Tuesday, March 8, 2016

As CEO of the Kentucky Baptist Foundation (KBF) I am honored and blessed to be supported and guided by an excellent board of directors. The sixteen men and women who serve as directors of the KBF are elected by the Kentucky Baptist Convention messengers during the KBC’s annual meeting. All of these individuals are active members in their local Kentucky Baptist church and they each bring unique professional experiences to the financial stewardship ministry of the KBF.

A nonprofit board member plays a vital role in the ongoing success of an organization’s ministry. While each organization has unique characteristics, nonprofit boards usually have decision-making responsibility on strategy, direction, policy and governance. A board’s scope of responsibility normally includes:

· Defining the organization’s mission and goals, and making decisions on strategy.

· Monitoring organizational performance to confirm the organization is being managed capably and there is accountability for the organization’s operations and results.

· Providing effective stewardship of the organization’s resources.

· Overseeing the stability of the organization in critical areas, including financial statement integrity and internal risk systems and controls.

· Enhancing the organization’s public image and generating support for its activities.

Directors of a nonprofit organization such as the KBF have fiduciary duties and thus have the responsibility to protect and preserve the organization’s resources for the ministry and charitable purposes for which the organization was established. This means that the directors accept a stewardship role over the KBF’s assets to confirm that resources are utilized in a reasonable and appropriate way. As persons of trust, board members have the authority and obligation to act prudently, honestly and in good faith on behalf of their nonprofit entity.

Kentucky Baptists can be assured that the KBF’s board of directors and staff work diligently to fulfill its stewardship duty in all facets of its work. The Kentucky Baptist Foundation is honored to work with Kentucky Baptist families that are seeking how best to organize their estate planning goals to achieve their personal and charitable objectives in support of their church and other Baptist causes. To learn more, you may contact the Foundation’s trust counsel, Laurie Valentine, or me at our toll-free number (866) 489-3533.

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Wednesday, February 24, 2016

Are the “minimum distribution rules” requiring you to take more from your IRA than you currently need for living expenses? Are you interested in establishing a charitable gift plan that will ultimately provide a significant gift to one or more charitable causes, while allowing you to “tap in” to an income stream at a later age?

A “flexible deferred charitable gift annuity” may be the way to solve your problem and accomplish your charitable giving objectives.

A deferred charitable gift annuity is gift plan in which a charity agrees, in exchange for a gift of cash, appreciated securities or real estate, to make fixed payments to the giver and/or one other person for their lifetime(s) beginning at least one year and one day after the gift is made. At the death of the “life income” beneficiary(s), whatever remains is paid out to the charitable cause(s) the giver designated.

While the annuity payments don’t start for a year or more, the giver is entitled to a charitable income tax deduction in the year the gift is made to the charity.

A “flexible deferred charitable gift annuity” offers an additional benefit. Instead of designating a particular, unchangeable start date for the annuity payments, the flexible gift annuity contract reserves to the giver the right to postpone the decision about the actual annuity payment start date until later.

Your charitable income tax deduction will be determined using the earliest date on which you can “turn on” the annuity payments. And, the annuity payment amount will vary depending on when you elect to start the payments…the longer you wait, the higher the annuity payment amount.

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Thursday, February 11, 2016

Laurie Valentine, trust counsel for the Kentucky Baptist Foundation and I had the recent pleasure of visiting with a husband and wife that were seeking guidance on what steps they should take to enable them to gift real estate property to create an endowment fund which would benefit two Kentucky Baptist causes they faithfully supported. The wife of this couple attended one of the Foundation’s legacy giving seminars a few months ago and was inspired to think about the Christian stewardship of their cash assets and non-cash assets (home equity, life insurance, retirement assets, investments or business interests). During our seminars we share with the participants that the average person’s net worth consists of 9% in cash and 91% in non-cash assets. When hearing this statistic, participants are enlightened that their financial stewardship covers more than just the 9% of their cash assets.

As Laurie and I spoke with this couple, we acknowledged that cash is the most common form of charitable gift for most people. However, by giving property, a donor may receive greater tax benefits and conserve cash for other uses. Also, the donor may find that they can sometimes make a larger gift at less after-tax cost by giving real estate or other non-cash property.

Most types of marketable real property may be given. Personal residences, farms, vacation homes, undeveloped land, and rental property are common sources. And, it is possible to give either all or a portion of the property’s value. The property should be readily marketable, especially if the donor plans to make the gift if the form of a life income arrangement.

Giving real property is handled by deeding the property to a charitable organization such as the Kentucky Baptist Foundation. Our staff, along with a donor’s professional advisor can help evaluate the benefits of gifting real estate as well as providing guidance in securing an appraisal and other steps.

Charitable gifts of real estate often involve more tax and legal complexities than other types of donations. Over the years, however, such gifts have provided substantial benefits to both the donors and the charity. To learn more, you may contact the Foundation’s trust counsel, Laurie Valentine, or me at our toll-free number (866) 489-3533.

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Wednesday, January 27, 2016

The Protecting Americans from Tax Hikes Act enacted in December 2015 (the “Act) includes a permanent extension of the Charitable IRA Rollover provisions first enacted in 2006. Those provisions allow certain Individual Retirement Account (“IRA”) owners to use taxable IRA funds to make charitable gifts without negative tax consequences.

Generally, distributions from an IRA, whether to the IRA owner or another person or organization, must be included as part of the IRA owner’s taxable income.

The Charitable IRA Rollover provisions permit a person who is 70 ½ or older to make tax-free gifts in any amount up to a total of $100,000 per year from a traditional or Roth IRA directly to qualified charities (“qualified charitable distributions”). Distributions from 401(k), 403(b) or other types of retirement accounts are not eligible.

The IRA owner is not entitled to a charitable income tax deduction for the qualified charitable distributions, but such distributions are not included in the IRA owner’s income.

IRA distributions that are not made directly to the charity don’t qualify.

Your church and our KBC and SBC agencies and institutions are “qualified charitable organizations”. Private foundations and donor advised funds are not.

While qualified charitable IRA distributions are not included in the giver’s income for income tax purposes, they are treated as part of the giver’s required minimum distributions. Therefore, those 70 ½ and older who must take required minimum distributions from an IRA and plan to make contributions to charity should strongly consider taking advantage of the ability to use their IRA as the funding source for making those charitable gifts.

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Tuesday, January 12, 2016

Most of us look at the start of a new year as a time for setting fresh goals in many areas of life. These goals typically revolve around common themes such as better health habits (I want to lose 15-20 pounds), improving personal relationships (I’ll be more attentive to my spouse) or better life balance (I’ll no longer take work projects home each evening). This is also a time when many of us will review and update our financial plans to make sure the plan will provide adequate financial security for our family.

As we consider strategies for accomplishing our personal and charitable financial goals for 2016 and beyond, we should schedule time to do the following:

· Identify your sources of income and expenses.

· Determine the value of your assets and the income (if any) they produce.

· Review the needs of family members and others, including your church, and consider any changes that may be needed in your plans.

· Define your goals for the management and future distribution of financial assets.

· Make a detailed list of your assets, such as home (including furnishings) and other real estate, vehicles and other personal property, financial accounts, retirement plans and other investments, including their original cost and current market value.

It is also beneficial to meet with your professional advisors to review and establish your personal and charitable financial goals. Your financial advisor, life insurance representative, accountant, attorney or other specialist can help you evaluate your specific circumstances and guide you in structuring an estate and financial plan that best achieves your goals.

Regular reviews of your long-range estate and financial plans are the best way to make certain your desires for the management and disposition of your property are up to date and meet your current needs.

The Kentucky Baptist Foundation is honored to work with individuals seeking how best to organize their estate planning goals to achieve their personal and charitable objectives to support their church and other Baptist causes. To learn more, you may contact the Foundation’s trust counsel, Laurie Valentine, or me at our toll-free number (866) 489-3533.

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Usage Policy

The Kentucky Baptist Foundation Facebook page, blog and website are designed to communicate with friends, clients, churches and other organizations about issues of relevance to the Kentucky Baptist Foundation. It is not intended as a forum or conversation board for issues not related to the information posted by the KBF. The KBF reserves the right to remove or block any posts it deems unrelated or inappropriate. The KBF also reserves the right to block users who do not follow this policy.